November 29, 2006, Dublin, Ireland, San Francisco &
Boston - HM Rivergroup PLC, a newly-formed Irish public
limited company, announced today that it has signed a definitive
agreement to acquire Houghton Mifflin Holding Company, Inc., a
leading U.S. educational publisher owned by affiliates of private
investment firms Thomas H. Lee Partners, Bain Capital Partners and
The Blackstone Group, and management. The purchase price of
approximately $3.4 billion consists of approximately $1.75 billion
in cash plus the assumption of approximately $1.61 billion in net
debt. In addition, as part of the transaction, certain Houghton
Mifflin management and employees will roll over $40 million of
their equity into equity of HM Rivergroup.

Concurrent with the acquisition of Houghton Mifflin, HM
Rivergroup will acquire Riverdeep Holdings Limited, a leading U.S.
publisher of branded interactive educational and personal
publishing products controlled by Barry O'Callaghan, executive
chairman of HM Rivergroup, in a share-for-share exchange valuing
Riverdeep at approximately $1.2 billion, including the assumption
of net debt. The combination of Houghton Mifflin and Riverdeep will
bring together one of the most established and successful
educational book publishers in the United States with the premier
publisher of electronic courseware for the K-12 market in the
United States. Houghton Mifflin and Riverdeep have combined
revenues and Adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) of approximately $1.425 billion and
$392 million, respectively, for the twelve months ended September
30, 2006.

"We are excited about the future of HM Rivergroup and the
ability to capitalise on the convergence of print and digital
education platforms," said O'Callaghan. "The combined business will
leverage Houghton Mifflin's brand names, established relationships
and large sales force to provide customers with an unrivaled
product offering. On a personal level, I feel very fortunate to
establish a partnership with my long-time friend, Tony Lucki, who
is one of the most respected figures in the educational publishing
business."

"Riverdeep represents an excellent strategic fit with Houghton
Mifflin, bringing its high quality electronic courseware offerings
to our core basal textbook and supplemental products business. This
combination will differentiate us from our competitors and will
enable us to participate as one of the leading players in the
fastest growing segment of the U.S. school education market," said
Tony Lucki, chairman, president and CEO of Houghton Mifflin. "I am
pleased to be joining forces with Barry, whose passion and vision
for this new enterprise are inspiring." Mr. Lucki will become vice
chairman of HM Rivergroup while continuing as chairman, president
and CEO of Houghton Mifflin Company, the publishing business of HM
Rivergroup.

HM Rivergroup will finance the acquisition of Houghton Mifflin
and the required refinancing of Houghton Mifflin's and Riverdeep's
debt with financing committed by Credit Suisse and Citigroup Global
Markets Limited, as well as with the cash proceeds of common equity
subscribed for by certain institutions and individuals, including
Mr. O'Callaghan. After completion of the transaction, Mr.
O'Callaghan and the management group will own approximately 50
percent of HM Rivergroup, former shareholders of Riverdeep (other
than Mr. O'Callaghan) will own approximately 15 percent, and new
investors will own the remaining 35 percent.

In connection with the transactions, Riverdeep Group Limited, an
affiliate of HM Rivergroup, intends to commence a cash tender offer
to purchase any and all of its outstanding 9.25% senior notes due
2011. Also in connection with the transactions, Riverdeep
Interactive Learning USA, Inc., an affiliate of HM Rivergroup,
intends to commence a cash tender offer to purchase any and all of
the outstanding 8.25% senior notes due 2011 and 9.875% senior
subordinated notes due 2013 of Houghton Mifflin Company and any and
all of the outstanding 11.5% senior discount notes due 2013 of HM
Publishing Corp. In each case, any such offers shall be made on the
terms and subject to the conditions set forth in the applicable
Offer to Purchase and Consent Solicitation Statement and related
Consent and Letter of Transmittal when they become available. The
Houghton Mifflin Company 7.2% senior notes due 2011 will remain
outstanding following the transactions. All other Riverdeep and
Houghton Mifflin indebtedness will be refinanced in conjunction
with the transactions.

HM Rivergroup expects to complete the acquisitions of Houghton
Mifflin and Riverdeep Holdings before the end of 2006, subject to
limited conditions, including the receipt of customary regulatory
approvals. Following closing of the transactions, HM Rivergroup
will change its name to Houghton Mifflin Riverdeep Group PLC.

Credit Suisse is acting as lead financial advisor and Citigroup
is also a financial advisor to HM Rivergroup. Weil, Gotshal &
Manges LLP and Matheson Ormsby Prentice are acting as legal
advisors to HM Rivergroup. Goldman, Sachs & Co. is acting as
financial advisor to Houghton Mifflin. Ropes & Gray LLP and
Mason Hayes + Curran are acting as legal advisors to Houghton
Mifflin. J & E Davy of Dublin, Ireland is serving as placement
agent for a portion of HM Rivergroup's common equity financing.

About Riverdeep Holdings Limited
Riverdeep Holdings Limited, with offices in San Francisco,
California; Cedar Rapids, Iowa; Dublin (Ireland) and Manchester
(United Kingdom), is a leading publisher of interactive products
focusing on education and personal productivity for the consumer
and school markets. Riverdeep's rich portfolio of interactive
award-winning products feature such well-known brands as the
Destination Success(R) solution, which includes Destination Math(R)
and Destination Reading(R); The Print Shop(R); Reader Rabbit(R) and
Kid Pix(R). For more information visit www.riverdeep.net.

About Houghton Mifflin Company
Boston-based Houghton Mifflin Company is one of the leading
educational publishers in the United States, with more than $1
billion in sales. Houghton Mifflin publishes textbooks,
instructional technology, assessments and other educational
materials for elementary and secondary schools and colleges. The
Company also publishes an extensive line of reference works and
award-winning fiction and nonfiction for adults and young readers.
With its origins dating back to 1832, Houghton Mifflin combines its
tradition of excellence with a commitment to innovation. The
company's website can be found at www.hmco.com.

About Bain Capital Partners, LLC
Bain Capital (www.baincapital.com) is a global private
investment firm that manages several pools of capital including
private equity, high-yield assets, mezzanine capital and public
equity with approximately $40 billion in assets under management.
Since its inception in 1984, Bain Capital has made private equity
investments and add-on acquisitions in over 230 companies around
the world, including such companies as Dunkin' Brands, HCA, Burger
King, SunGard, Advertising Directory Solutions, Warner Music Group,
Toys "R" Us, Warner Chilcott, Jostens Learning and AMC
Entertainment. Headquartered in Boston, Bain Capital has offices in
New York, London, Munich, Tokyo, Hong Kong and Shanghai.

About Thomas H. Lee Partners, LP
Thomas H. Lee Partners, L.P. is one of the oldest and most
successful private equity investment firms in the United States.
Since its founding in 1974, THL Partners has become the preeminent
growth buyout firm, investing approximately $12 billion of equity
capital in more than 100 businesses with an aggregate purchase
price of more than $100 billion, completing over 200 add-on
acquisitions for portfolio companies, and generating superior
returns for its investors and partners. The firm currently manages
approximately $20 billion of committed capital. Notable
transactions sponsored by the firm include, in addition to Houghton
Mifflin, such companies as Warner Music Group, Dunkin Brands, VNU,
Michael Foods, Fisher Scientific, Experian, TransWestern, Snapple
Beverage and ProSiebenSat.1 Media.

About The Blackstone Group
The Blackstone Group, a global private investment and advisory
firm, was founded in 1985. The firm has raised approximately $67
billion for alternative asset investing since its formation of
which approximately $30 billion has been for private equity
investing. The Private Equity Group is currently investing its
fifth general private equity fund with commitments of $15.6
billion, and has over 80 experienced professionals with broad
sector expertise. Blackstone's other core businesses include
Private Real Estate Investing, Corporate Debt Investing, Hedge
Funds, Mutual Fund Management, Private Placement, Marketable
Alternative Asset Management, and Investment Banking Advisory
Services. Further information is available at http://www.blackstone.com.